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Castle Harlan, Evercore work on possible fund revamp

  • Castle Harlan may still raise fund VI: spokesman
  • Firm chose last year to put off fundraising
  • Fund V raised $800 mln; Fund IV collected $1.16 bln

 

Castle Harlan Inc, which chose to hold off raising a sixth fund last year, hasn’t decided whether it will restructure its fourth and fifth funds, said Chairman and CEO John Castle.

The PE firm is “still examining restructuring [the funds] as an alternative or a possibility,” Castle told Buyouts. The firm has not reached a conclusion whether the funds “will be changed or not,” he said.

Bloomberg News reported in May that the PE firm may seek new investors for funds IV and V, so that it could make new investments. Existing LPs would be given the option of participating in the offering, retaining their stakes or selling out, the story said.

Castle Harlan Fund V closed at $800 million in 2010. The fourth fund collected $1.16 billion in 2003, according to a statement from that time.

The PE firm had been working with Park Hill Group on the possible restructuring, Castle said. Castle Harlan opted to seek out new advisers after a former Park Hill executive was arrested for fraud in March. Andrew Caspersen, a former Park Hill managing principal, pleaded guilty in July to charges he tried to defraud investors, including friends and family members, out of nearly $150 million, Reuters reported.

“That’s part of the reason why the process got slowed up,” Castle said referring to Caspersen’s arrest.

Castle Harlan never officially retained Park Hill, which did preliminary outreach to see how the deal would be received in the market, a different source said. Park Hill determined the transaction would be “challenging” and passed, the source said.

Evercore is now advising on the possible restructuring of the Castle Harlan funds, Castle said.

Castle Harlan may raise another pool, a spokesman said. In 2015, the 29-year-old private equity firm decided to call off plans for its sixth fund. Castle Harlan was seeking $800 million for Fund VI in 2015.

Separately, Branford Castle, the family office started by Castle, is marketing for a $150 million fund, a source said. A final close is expected by the end of October, the source said.

Evercore and Park Hill declined comment.

Action Item: Contact Castle Harlan: info@castleharlan.com

Illustration courtesy ©iStock/chiarabramuzzo